Property-income tax bill may be final in North Dakota Legislature

BISMARCK — North Dakota property tax payers would get $295 million in collective relief in a bill finalized Monday that also includes personal income tax cut of $90 million and trims corporate income taxes by $10 million.

A House-Senate conference committee finished work on Senate Bill 2199 Monday. Now both chambers must approve the committee’s changes and pass the full bill.

Four Fargo school officials observed the conference committee’s meeting and Superintendent Rick Buresh said afterward the Fargo district is concerned about the bill’s mandate that Fargo and several other districts seek voter approval of their mill levies by 2012.

Others that must hold elections include Grand Forks, Bismarck and Williston.

The bill’s property tax cut was a centerpiece of Gov. John Hoeven’s re-election campaign last year. It would send state surplus oil tax revenue on a dollar-for-dollar to school districts that agree to cut their mill levies by up to 75 mills. Most schools’ levies would then be no more than 110 mills.

The bill originally contained only property tax relief, while several separate bills in the session proposed income tax relief. The House grafted the income tax cut onto the property tax bill earlier this month. It is a permanent tax cut.

Several school districts with unlimited mill levies or high mill levies must get voter approval by 2012 to maintain either the unlimited levy or to stay above 110 mills.

The districts with unlimited levies are Grand Forks, Bismarck and Williston. The other districts affected by the election mandate include Fargo, which is currently limited by voters to 295 mills, though Buresh said Monday that the actual levy is currently about 30 mills below that.

As for the election in 2012, he said, “We’re a little bit concerned about how that would unfold.” Buresh, Fargo board members Dan Fremling and James Johnson and Dan Huffman, Fargo’s assistant superintendent for business services, were among many people in the audience watching Monday’s committee action.

Two Democratic-NPL legislators on the conference committee, Rep. Scot Kelsh, D-Fargo, and Sen. Arden Anderson, D-Wahpeton, vo-ted against Monday’s bill because they disagree with inclusion of an income tax cut. An income tax cut bill should stand on its own, he said.

And, Kelsh said, legislative leaders had told Buresh the bill would require an election no sooner than 2015.

Kelsh hopes the Senate rejects the conference committee report and sends the bill back for further negotiations.

The personal income tax reduction in the bill calls for about a 12 percent cut in each of five brackets. The lowest bracket, for single people earning $33,950 and below, drops from 2.1 percent to 1.84 percent. The highest bracket, for those earning more than $373,950, drops from 5.54 percent to 4.86 percent.

The bill drops the number of corporate income tax brackets from five to three. The first $25,000 of taxable income will be taxed 2.1 percent; the second taxes income of between $25,000 and $50,000 at 5.25 percent, and the third bracket taxes companies earning more than $50,000 taxable income at 6.4 percent. In current law, corporations earning as little as $3,000 in taxable income pay at least 2.6 percent.

One of SB 2199’s conferees, Sen. David Hogue, R-Minot, protested that the bill offers too little corporate income tax relief, but nevertheless voted for the new version.

The Senate may vote on the conference committee report today.

Cole works for Forum Communications Co., which owns The Jamestown Sun

Tags: news, house, senate, legislature, tax, income